UFC 84 Gate: $3.7 million

May 25, 2008

Todd Martin of CBSSports.com is reporting that UFC announced a sellout crowd of 14,773, producing a live gate of $3.7 million for the UFC 84 card that originated from the MGM Grand Garden Arena in Las Vegas. This has to be considered a strong gate for the UFC. Though not the box office bonanza of UFC 79, which did $4.9 million, it did perform much better than UFC 81, which drew a $2.4 million gate. All three events took place in Vegas.

Bonuses for submission, KO, and fight of the night were $75,000. These bonuses tend to fluctuate, depending on if the card is foreign or domestic, PPV or Spike, but are in line with bonus levels for UFC 83 from Montreal.

CBS/ EliteXC Broadcasters' Conference Call

May 24, 2008

Listen in as MMAPayout.com’s Andrew Falzon interviews CBS broadcaster Gus Johnson, play-by-play, and Frank Shamrock, color commentator.

(Unfortunately, Mauro Ranallo had to excuse himself at this point in the call, as he had to do his radio show for The Fight Network.)

Click here to download and listen.

EDITOR’S NOTE: Thanks to Fightlinker.com for audio hosting.

HDNet Fights, Adrenaline agree to 3 fight deal

May 24, 2008

It was announced on this week’s edition of Inside MMA that HDNet Fights and Adrenaline MMA have reached an agreement to air Adrenaline MMA’s first three cards on the the high definition network. Adrenaline MMA, formerly M-1 Global, will hold their first card on June 14th in Chicago and is headlined by Mike Russow vs Jeff Monson. The company’s second show will originate from Moline, Illinois on September 6th with Ben Rothwell and Tim Sylvia appearing on the card.

Behind The Music: UFC Music Licensing

May 23, 2008

Our friend Sam Caplan over at fiveouncesofpain.com has a nice piece detailing the UFC’s licensing of new music for use in their various cable, PPV and television programming. The piece does a good job detailing the who of the situation, but not really the why of the situation. Much of the current music in programs such as The Ultimate Fighter, UFC Unleashed, and UFC Wired are remnants of Zuffa Records, a music label founded by the Fertitta’s and used as an in house source for musical programming.

The label has since been disbanded, but the music has lived on in UFC programming because it is a quick cheap source of background music that doesn’t need to cleared with music publisher’s and royalties paid for each use or incarnation, such as DVD sales, online sales, etc. Zuffa has chosen to license a relatively unknown band like Hard8 because they are able to do so on their terms, probably seeking a greatly reduced royalty rate or paying a one time flat fee for all future uses.

These financial concerns also come into play in other ways. To any of you out there who have been to a live UFC event and seen the highly praised Baba O’Reilly clip featuring UFC action and wondered why they aren’t opening each and every show with that great piece, the price to license The Who’s music for repeated airings as an intro is probably too steep for Zuffa. It’s a shame, too, because that thing is one of the better sales tools they have done.

Zuffa Wins Emergency Stay in HDNet Lawsuit

May 23, 2008

As MMAPayout.com was the first to report, earlier this week HDNet Fights and Randy Couture scored a major procedural victory in its declaratory judgment action against Zuffa. However, as expected, Zuffa subsequently appealed the ruling and MMAPayout.com has learned that today the Court of Appeals for the Fifth District of Texas granted an emergency stay pending the mandamus filed by Zuffa.

As a result the summary judgment hearing scheduled for June 2 is now on hold indefinitely pending the Court of Appeals’ decision. Zuffa’s latest move is consistent with its litigation strategy which appears to be designed to end or at least delay the Texas state court case in favor of the company’s later filed arbitration action against Couture which is proceeding simultaneously, although much slower, in Nevada. Couture’s promotional contract is the subject of each proceeding, however, due to the legal doctrines of res judicata, collateral estoppel, and the full faith and credit clause, the first ruling issued will most likely decide the matter.

Another Proelite.com Exec Gone, Sale Possible?

May 23, 2008

MMAPayout.com has learned that Jeremy Goecke, the number two man under previous ProElite.com President Kelly Perdew, has parted ways with Proelite. This comes quickly on the heels of the resignation of Perdew, who resigned on May 20, and leaves a void of experienced leadership at the online arm of ProElite, Inc.

MMAPayout.com has also heard rumors from highly placed sources that ProElite may be trying to sell the website. Such a sale wouldn’t bring much in the way of revenue but would help to get the significant losses off of ProElite, Inc.’s books. The company experienced a $3.2 million loss on website operations in 2007 and is on pace to post similar losses for 2008 based on first quarter results.

Strikeforce End Game for Television

May 23, 2008

With Strikeforce showing strong ratings gains, the company is now in a much better position to negotiate with NBC. With the show nearly tripling it’s audience since the premiere and showing strong numbers in the 18-35 demographic, Scott Coker can make a strong case to NBC execs to give them a chance in an earlier time slot. The current slot is essentially a foot in the door with NBC, a means to an end, rather than an end unto itself.

Strikeforce could angle for an occasional fill-in for SNL during it’s summer hiatus or a possible week-end afternoon slot. The improved slot could still be a time buy situation, as that seems to be the trend for some of the lesser sports when it comes network coverage. Some examples of this are the PBR (professional bullriders tour) using a time buy on Fox to boost their profile and leading to a paying deal with Versus, LiveNation’s Motocross tour, and some of the various IMG programming seen on the weekends.

Pro Elite Quarterly Report: First Quarter 08

May 22, 2008

View the complete quarterly financials here

Analysis: The company experienced a loss of $5.6 million during the first quarter of 08. The company continues to be plagued by high selling, general, and administrative expenses, much of that due to the sheer size of the company. The company did begin to see it’s first license fees from Showtime, totaling $1.2 million in the first quarter. These license fees will be a key to reaching profitability, in addition to PPV revenues. With increased exposure on CBS, the company should be able to better market their PPV efforts, which have accounted for minuscule amounts so far. Strong television feeding into PPV’s is the map for success in the MMA business, and PPV will have to be reintroduced as a revenue stream if the company is to reach profitability. If the CBS shows are successful I would expect PPV to resurface in the fourth quarter of 08, possibly in time for a Cung Le- Frank Shamrock re-match.

The company’s online component was once again a large drain on funds, with minimal revenues generated. After losing over $3 million on the site during 2007, the company posted revenues of roughly $26,000 against operation expenses of $725,000. Such losses may have been a harbinger of the recent resignation of Proelite.com President Kelly Perdew. The company has recently launched a Video on Demand service to better monetize their website, but the success of these efforts will depend greatly on the fight promotion portion of the company. Expending the vast sums they have on the website is a case of putting the cart before the horse, so to speak, as having a vibrant and prosperous fight promotion will be the driver of these other revenue streams.

Another significant cost was the expensing of options take by company executives. These items counted for almost $600,000 against revenue, which tend to distort the company’s performance. Factoring out these items, the company still generates a loss but some of their cost cutting measures, such as staff reductions, seem to be narrowing the deficits somewhat.

Notes:The company’s court battle with Wallid Ismail is ongoing and will go to trial in federal court on September 16th, 2008. This lawsuit stems from the start-up phase of Pro Elite, with Ismail claiming to have not been compensated for assisting during the initial raising of capital.

The company’s agreement with Mark Burnett concerning a reality show is reaching a critical phase, with their agreement becoming void if no license agreement is reached by June 15th. There is a two week window after the May 31st CBS debut to gauge the viability of this reality series, so expect to hear news soon in this area.

Billboard Rec-Sports DVD Sales Chart – 5/31

May 22, 2008

  1. WWE: Twist Of Fate: The Matt & Jeff Hardy Story
  2. WWE: Triple H: The King Of Kings
  3. NFL: Super Bowl XLII Champions New York Giants
  4. UFC 80: Rapid Fire
  5. WWE: The Best Of Raw: 15th Anniversary 1993-2008
  6. Pride Fighting Championships: Shockwave 2006
  7. UFC: Best Of 2007
  8. MLB: Red Sox Memories: The Greatest Moments In Boston Red Sox History
  9. WWE: The Legacy Of Stone Cold Steve Austin
  10. UFC 79: Nemesis

Interesting to see a Pride release on the chart.

UFC 84 Preview: Dissecting the Hype

May 22, 2008

Last night’s Countdown to UFC 83 was another strong effort. The opening preview was spectacular. The show continues to move in the 24/7 documentary direction as opposed to pay-per-view barker. That means more emphasis on the fighter’s and the fighter’s presenting their issue in their own words and less of Dana White and Joe Rogan promoting the fights (White appeared only briefly in response to comments from Tito Ortiz). This works well when you have natural issues to promote (i.e. bad blood over the steroid issue between Sherk and Penn or the GSP-Serra hostility), but I still think theres a place for White in hyping the fights that don’t speak for themselves.

The family portraits that dominated Countdown to UFC 83 were gone, but there was still a conscious effort to humanize the fighters with extensive clips of Sean Sherk with his child and footage of the other fighters and their families as well. This is a page from promotion 101 which teaches that in order to make people care enough to pay $45 to see a fight you have to humanize the participants in order to give people a reason to care what happens.

The show also featured a variety of camera shots and setups. The production has never been bad, but its been eye catching enough during the last two outings to make me wonder whether or not they’d hired a new production team. The credits look the same, with the outside work apparently coming from Positive Image Video, the same company they’ve used in the past.

It was interesting to see how they choose to handle the two controversial issues that are central to Saturday’s event. I thought the Sherk steroid suspension and the subsequent stripping of the Lightweight Title were handled about as openly as could be expected and made for a strong storyline. My only complaint was that they waited fifteen minutes before revealing the mysterious reason that Penn had Sherk’s title.

The handling of Tito Ortiz’s pending departure was more muddled. It was certainly alluded to, but never explicitly explained. Ortiz’s allusions to his last fight were presented as if at his age any fight could be his last. With as public as the situation has gotten, I would have put it front and center.

I think there’s a strong case to be made that the build up to the event should have been built around Tito Ortiz v. Dana White. Ortiz and White are the two biggest stars on the card and also the two best talkers. Furthermore, the boss-employee hostility is something most people can relate to. Vince McMahon has done some of his best business interjecting himself into the storyline in that fashion, but therein may lie the rub. With all the criticism White has taken (particularly from Gary Shaw) about making himself the star ahead of the fighters and pushing the UFC brand above all else, there may have been some reluctance to go in that direction.

Overall, this looks like a strong show, but I’m not sure how much it will resonate outside of the hardcore fan base. Best case scenario for the company is Penn, Silva, and Machida coming out on top. A lot of people are focusing on the Ortiz-Machida match as far as importance to the company, but it’s Silva-Jardine that has the most important business ramifications. A Silva win sets up a potential money rematch with Liddell or Jackson down the line, whereas Jardine seems largely unmarketable.

The Ortiz farewell fight has the potential to provide the most drama of the evening, and probably not inside the octagon. For pro wrestling fans this is shaping up as something akin to Bret Hart’s WWE departure in 1997. But for any real fireworks to take place, Ortiz will need to find a way to do what no one else has been able to: beat Machida.

SEE ALSO: Countdown to UFC 84 Rating: What Does It Mean for the Buy Rate?

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